Stakeholder value is a management principle that emphasises the importance of creating value not only for shareholders, but also for all parties with an interest, or stake, in a company. These stakeholders include employees, customers, suppliers, communities, and the broader society.
It involves identifying and understanding the various groups and individuals who are affected by or can affect the company’s operations, decisions, and performance.
Stakeholder value management seeks to balance the often conflicting interests of different stakeholder groups. This involves considering the needs, concerns, and aspirations of each group.
Recognising the impact of business operations on the environment and taking measures to minimise negative effects, such as reducing waste, conserving resources, and adopting sustainable practices is also a part of stakeholder value.
By considering the interests of all stakeholders, companies can better anticipate and manage risks related to reputational damage, legal issues, and other potential challenges.
Companies committed to stakeholder value often measure and report on their performance in relation to various stakeholder groups. This can include metrics related to employee satisfaction, customer feedback, environmental impact, and community engagement.